The Licensing Process - Business Processes | Securities Commission Malaysia

The Licensing Process

Under the Capital Markets and Services Act 2007 (CMSA), anyone wishes to carry out capital market activities (unless a registered person) is required to be appropriately licensed. The Securities Commission Malaysia (SC) is the sole licensing authority that approves licences for capital market intermediaries to be engaged in the regulated activities.

Under the CMSA, capital market intermediaries (CMI) that are fit and proper is issued with one licence that will enable them to carry on one or more regulated activities.

The SC is entrusted with the responsibility of ensuring an efficient and transparent licensing process and that the licensed intermediaries and its representatives are competent and proficient in providing their services to the investors.

There are two types of licensing applications, namely -

New Capital Markets Services Licence (CMSL) – granted to a principal; and
New Capital Markets Services Representative’s Licence (CMSRL) – granted to a representative to enable him to carry on any one or more regulated activities on behalf of his principal.

Who are licensed by the SC
The CMSL and CMSRL are issued for the following regulated activities:

Dealing in securities¹
Dealing in derivatives
Clearing for securities/ derivatives²
Fund management
Dealing in private retirement schemes³
Advising on corporate finance
Investment advice
Financial planning

Licensing Process
The licensing process for new CMSL and CMSRL applications is shown here.

Licensing Application Kits containing Licensing Handbook, Frequently Asked Questions on Licensing and relevant forms are available on the SC’s website for your reference.

Submission to the SC
CMSL holders and New CMIs are required to submit the application forms and supporting document as stipulated in the Licensing Handbook via the SC’s electronic licence application submission platform.

Pre-requisite for New CMIs
New CMIs are required to engage the SC for consultation prior to application submission and meet the requirement stated in the Client Charter below.

New eligible CMIs4 that are subject to Focus Scope Assessment (FSA) Framework, are required to submit a third-party independent validation report conducted by the auditor registered with Audit Oversight Board (AOB) at the point of application submission.

Client Charter
For applications to be assessed in accordance with the SC’s Client Charter as per below table, the submission made must be complete, valid, accurate with full disclosure and meet the relevant licensing requirements stipulated in the Licensing Handbook (Complete Submission) at the point of submission. The commencement of the SC’s assessment process is based on the conditions stated in the Complete Submission.

Type of Application	Time (weeks)
New CMSL	6
New CMSRL	2

^1,3Agents and employees of a holder of a CMSL for dealing in securities restricted to unit trust or dealing in private retirement schemes will not be required to hold a CMSRL. However, they must be registered with the
Federation of Investment Managers Malaysia (FIMM) and comply with any provision or guidelines issued by the SC.

² Employees of a holder of a CMSL for clearing for securities or derivatives will not be required to hold a CMSRL.

⁴Eligible CMIs are as follows:

a. Fund management – boutique portfolio management
b. Advising on corporate finance
c. Investment advice
d. Financial planning